By Ronale Tucker Rhodes, MS
With the recent decision by the U.S. Supreme Court to uphold all but one provision of the Affordable Care Act (ACA), many people are breathing a sigh of relief. However, while the Act provides significant benefits for the chronically ill - such as providing high-risk pools for those with pre-existing medical conditions, eliminating lifetime limits and prohibiting insurers from rescinding coverage - there is a loophole that can render some consumer benefits null: the grandfather provision.
Grandfathered status applies to any individual, group or collectively bargained multi-employer and single employer health plans that were in effect on March 23, 2010. Grandfathered individual plans apply to those who have enrolled in the plan prior to March 23, 2010, and to their dependents who enroll in the plan either before or after March 23, 2010 (as long as the plan allowed for family coverage). However, those same plans are not considered grandfathered for individuals who enroll in them after March 23, 2010. Grandfathered group (or employer-based) plans apply to individuals regardless if they are added to the plan after March 23, 2010.
It is possible for plans to lose grandfathered status. Individual and group plans lose their status if significant changes are made to the plans that reduce benefits or increase costs to consumers. Some examples of this are:
- Eliminating benefits to diagnose or treat a particular condition
- Increasing the up-front deductible patients must pay before coverage kicks in by more than the cumulative growth in medical inflation since March 23, 2010, plus 15 percentage points
- Reducing the share of the premium the employer pays by more than 5 percentage points since March 23, 2010. Collectively bargained plans can only lose their grandfathered status when the collective bargaining agreements are terminated.
The significance of grandfathered status should not be overlooked, especially for the chronically ill. For instance, grandfathered individual health plans are not required to phase out annual dollar limits on key benefits (although they are prohibited to apply lifetime dollar limits) or to eliminate the pre-existing condition exclusions for children under 19 years old. However, beginning January 1, 2014, the ACA will require grandfathered group plans to eliminate pre-existing condition exclusions for everyone. In addition, grandfathered individual and group plans are not required to provide recommended preventive services at no charge, offer new protections when appealing claims and coverage denials, and protect the choice of healthcare providers and access to emergency care.
So, if you are like many who are eagerly awaiting the gradual implementation of the consumer protections under the ACA, do you know if your insurance plan is grandfathered? As of September 23, 2010, all health plans are required to disclose their grandfathered status in all plan materials distributed to subscribers or beneficiaries. If you are covered under a group health plan, you can check with your employer or your health plan’s benefits administrators.